Meaning of the terms

The freedom to study how the program works, and adapt it to your needs.
Access to the source code is a precondition for this.

The freedom to redistribute copies so you can help your neighbour

The freedom to improve the program, and release your improvements to the
public, so that the whole community benefits . Access to the source code is
a precondition for this.

The Open Source definition is similar, but some licences can qualify as
open-source and not as free
software. This is usually not an issue, because the majority of open source
software out there is free as well. Moreover, lately most of the companies
and people who have phrased their own software licences, have tried to also
get the Free Software Foundation to approve their licences as free software
in their eyes.

Despite common belief, selling free/open-source software is perfectly
legitimate. In fact, one can charge as much as he pleases for it.
Nevertheless, most free software is distributed for free or for very
cheaply on the Internet and other mediums. This is due to the fact that its
freely distributable nature does not give way much to sale value, so there
usually is no point in attempting to mandate a charge for selling it.

Another common misconception is that it sometimes cannot be modified or
customised for internal use. In fact, all free software (but not all
open source software), can. Only when you wish to distribute it (free of
charge or commercially), you may have to distribute your changes
(depending on the licence - not all open-source licences require that). The
use of open source software to process proprietary content or be processed by
non-open-source programs is also, always available. Thus, an open-source C
compiler can be used to compile the code of proprietary programs, such as the
Oracle database server.